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Daily Insurance Industry News
Sunday 26th of May 2019
February 13, 2008

Firms subject to rising claims costs, warns Allianz

by David Masters

Story link: Firms subject to rising claims costs, warns Allianz

Firms subject to rising claims costs, warns Allianz

Allianz Legal Protection has warned that firms are increasingly subject to rising claims costs. This is due to new compensation limits for employment tribunals and redundancy pay.

The higher limits, which have been in effect since the beginning of this month, are:

  • The maximum amount of a week’s pay for calculation statutory redundancy pay has increased from £310 to £330;
  • If a dismissal is found to be automatically unfair because it fails to follow the statutory procedures, then the minimum basic award is now £1320;
  • The minimum basic award for certain dismissals has risen from £4,200 to £4,400;
  • The maximum statutory redundancy payment or basic award has increased to £9,900.
  • “Rising compensation and rising litigation pose a threat to businesses, especially smaller firms who may not have the reserves to absorb the costs,” said David Vine, Allianz Legal Protection.

    “Employers should note that not only could they face a payout of as much as £72,900 for failing to follow fair dismissal procedures under these regulations, there is also no upper limit in cases involving discrimination and whistle blowing. Keeping abreast of current employment legislation is vital but companies also need to review their legal expenses cover in light of these increased limits.”

    In spite of this potential for costly legal action, the majority of small businesses are uninsured. It is estimated that less than half of SMEs have the required cover.

     

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